State explains why fuel prices have been rising

Friday June 14 2019

A motorist fuels his car. Kenyans await the energy regulator to announce new fuel prices on June 14,2019. PHOTO | FILE | NATION MEDIA GROUP


As Kenyans await the energy regulator to announce new fuel prices later today, the government has come out to explain why pump prices have been rising in recent months.

Since January, the cost of petrol has risen by Sh11.94, diesel by Sh8.31 and kerosene by Sh7.63.


In May review by the Energy and Petroleum Regulatory Authority (Epra), formerly Energy Regulatory Commission (ERC), petrol, diesel and kerosene prices went up by Sh5.43, Sh2.24 and Sh2.40 per litre, respectively, in Nairobi.

Mr Pavel Oimeke, the director-general of Epra, links the steep rise in the cost of petrol, diesel and kerosene to cost of crude oil in the international market.

In his presentation to the Senate Committee on Energy, Mr Oimeke said landed cost, which is the weighted average cost per product of imported petrol, diesel and kerosene, taxes and levies as well as transport and distribution costs had also contributed to the rising costs.


“But the cost of crude oil in the international market plays a fundamental in the determination of the final prices for refined product,” he said on Wednesday.


“In the last five months, the price of crude oil in the international market has been on the rise moving from a low of low of US dollars 59.50 (KSh6,000) per a barrel in December 2018 to US dollar 73.05 (Ksh7,400) in April, 2019, an increase of 22.8 per cent.”

The Epra boss had been invited by the committee to explain why the cost of fuel has been rising in the recent months, increasing the cost of living.

He told the committee led by Nyeri Senator Ephraim Maina that currently, Kenya sources 100 per cent of its petroleum products from the international market after every 30 days.

Epra calculates and publishes the maximum pump prices of petrol, diesel and kerosene every 14 the day of the month in accordance with the Energy (Petroleum Pricing) Regulations, 2010.

The pump prices become effective on the 15th day of the month.


The increase in international prices has been caused by the frayed ties in the oil-rich Middle East since May— a situation that has been made worse by continued sanctions by US on Iran.

According to The New York Times, Thursday’s attack on two tankers in the Gulf of Oman saw the oil prices jump by as much as 4.5 per cent.

“The Gulf of Oman lies on the other end of the strategic Strait of Hormuz from the Gulf, part of the vital shipping lane through which at least 15 million barrels of crude oil pass daily,” says the US publication.

Mr Oimeke assured Kenyans, that Epra will always strive to lower fuel prices when the cost of crude on the international market goes down.

“I want to assure Kenyans, through this committee that we will automatically reduce the prices as soon as the prices come down in the international markets,” he said.